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China prioritizes local chip needs during global crunch

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One of China’s biggest chipmakers has warned it may have to drop orders from foreign clients next year to prioritize domestic demand, Nikkei Asia has learned, as the country pushes to build a “secure and controllable” tech supply chain.

Hua Hong Semiconductor, China’s No. 2 contract chipmaker, warned it may even have to drop some orders from non-Chinese chip developers due to the supply constraints, the sources added, citing China’s national policy to prioritize demand from local chip developers to boost supply chain resilience.

China is wrestling with a global semiconductor shortage while simultaneously attempting to increase its tech self-sufficiency amid tensions with the U.S.In addition to securing chips for domestic needs, industry sources say China is also prioritizing its local tech industry more broadly, such as by moving national champions to the front of the line for electricity supplies during recent power shortages.

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